How Sunrun Plans To Spend Its New $150 Million Funding Round

Heather Clancy
, SubscriberI write about technology for conservation, efficiency and reuse.Opinions expressed by Forbes Contributors are their own.

Solar leasing pioneer Sunrun snagged another $150 million in equity funding in mid-May, boosting its total raised so far to $300 million.

Sunrun CEO Lynn Jurich said those funds -- the investors aren't being disclosed but include $100 million from a "leading public institutional investor" -- will be focused in large part on one big area: building out processes and technology to help reduce the cost of signing up new solar customers and keeping existing ones happy.

"This is all about reaching the highest numbers of customers with the lowest cost structure," Jurich said when I spoke with her earlier this week.

That includes software tools that can help price out new contracts more quickly, optimize solar panel designs for individual homes, build appropriate financing options, arrange for truck rollouts, and so on.

What makes Sunrun unique is that is opening up its operations platform to other residential solar companies – including rival Sungevity -- in an effort to reach a broader number of customers than it can on its own. It also works with approximately 30 "channel partners" that can also use it operational tools to help reduce expense"The biggest issue for long-term sustainability is going to be customer acquisition and customer acquisition costs," Jurich said.

She estimates that the residential solar movement so far has reached about 0.3% of U.S. households, or about 500,000 homes. Sunrun's services currently cover 11 states including Arizona, California, Colorado, Connecticut, Hawaii, Massachusetts, Maryland, New Jersey, New York, Oregon and Pennsylvania.

The company is always looking for opportunities to expand that presence but Jurich wasn't prepared to suggest where. In the first quarter, Sunrun bought the residential solar division of REC Solar, distributor AEE Solar, and racking hardware company SnapNrack, to support its rapidly growing direct business, which grew by 100% during the quarter.

One issue weighing heavily on Jurich's mind is how to capture and capitalize on referrals from Sunrun customers, which means some of those new funds will also be spent on customer services processes.

After all, most solar leasing contracts are 20 years long and Sunrun needs to deliver growth over the long term, but not at the expense of compromising the customer experience. "We are constantly looking at ideas for streamlining and standardizing," she said. "The biggest story is around delivering a large customer base of happy customers."